Putting things together

Fake break high and now we’re settling lower…
There’s no way that I know of to predict a fake break - it just happens. The question is more like how can one determine if the break that is being witnessed is fake… and how quickly this can be done. I don’t particularly have a great trigger for the differential, but the break just happened to meet the criteria I had for what could possibly be a top. It just so happened that it was the first bar of the wave breaking new highs, but that didn’t matter to me. See the trigger, take the trigger.

The natural state is slightly bullish here because of the break, but due to the lag (we’re now 24 hours in after the first break) I’m more bearish. Bear daily target would be 1.052x with 1.058x as the stop. The weekly structure is a bit sensitive, only 200 pips from the lows, so shorts are in an interesting position. I’ll talk about my thoughts on it later in the week if this develops into a down week.

Not a bad move. Got the ~1.05 short break I was looking for and was sleeping during the up spike. But when it failed to close/break 1.0626, that’s another great opportunity for me. Since I have a strong mental psych, taking 9 losses and 1 win doesn’t bother me, so long as the 1 win makes up for the losses and then some. That’s the mentality I have when taking positions that are close to breaking but don’t make it. Of course, you can’t just willy nilly pick every bar that doesn’t break and look for the reverse swing on it, but doing so with even the slight indication of market swing knowledge on a demo will teach you quite a bit about how these sorts of positions can work out favorably.

I’m not pretending to be all amazing - I’m just persistent.

Most people would say, guys look I caught a 110 pip short swing just 15 pips or so from the top. The whole swing was only 170. What insight by me! But I took a loss from an earlier short and shorted again anyway. If I had added to my short rather then close and reopen, that would look great, but that’s just not something I can monitor or feel comfortable doing atm. You win some, you lose some. The goal is to win bigger and win more frequently. Market participation theory is simple. It’s not easy, but it’s simple.

Anyhow, I’m short again now with a pretty protected stop. We might see chop for the rest of the week, we might just see a continuation down move. Either way I’m in the perfect spot: low risk, high reward.

Low risk - lost. No biggie. We COULD be entering wide chop, but I never bet for it as it just isn’t as frequent.
The scenario now is that price has teased highs 3 times, retreated with some breaking lows, and then a slow and steady push and breakthrough last night into the highs we have today. That changes my sentiment from bear to bull. I missed the opportunity to go short for a scalp (hard to find too) so now I’m just waiting for a good long spot. something in the 50% range (1.0570) would be nice but I’ll see what happens. No need to chase the market, just know your spots.

Bullish on the opening tip, want to see a better gap close.

Gap closed, back to kind of being in chop here. Have to be quite precise getting in or out or else fishing for a move. I’m in the latter group. I already showed it once - these are my favorite spots to play. One nice win (not even big or lucky) makes up for a bunch of losses. Pick and probe and eventually you’ll get paid.

Too early on the pick. I normally would have waited for some confirmation but I was heading to bed and would rather take that trade with reduced risk than not take the trade at all.
I believe most people are out shopping for a good short position for a bigger (D1/W1) swing, so there’s room on both sides here in the grand scheme of things. As for a short term play, I’m currently short at ~1.07 looking for a small pullback to 1.0675. Stalling patterns tend to lead to small reversals as opposed to breakouts.

Stayed up a bit tonight and glad I did. Sometimes you just gotta take what the market gives you.

Today on bear targets I was looking at 1.0681 minimum for the day, followed by 1.0676 for the minimum pullback. I was slightly lazy (or greedy…) with my target at 1.0675. When price started moving down I moved my stop as well to save it from anything crazy if I went to bed. However, I happened to have some spare time and pulled up the 5m chart.

This is more market theory than anything else (obviously such evidence is difficult/impossible to gather) but my main thought is that to break lows, I would be looking for fresh sellers - the wave of sellers that brought us to just the tip of 1.0675 is gone. I have 1.06751 as the low on my chart, and with spread I’d be a couple of pips off. I saw signs of possible movement away from my target so I jumped ship when I got a price I liked. Navigating live scenarios like this is practice and patience. To know what kind of opportunities you’re going to get, and to be able to control yourself and not burn yourself over a pip or two. If I waited 5 minutes I would have walked away with nothing.

Back on next pick. Quite a few high probability targets clustered on the up side of things. I’m looking at 1.0650, 1.0655, and 1.0661. I wouldn’t mind shorting this, but not until we hit these areas and see how price reacts.

One of the things I’m looking to improve on is correctly assessing how large of a position to take. I think I have it correct atm but we will see as trades continue to roll in and my PL chart updates.

As I write this with EU at 1.0670, I think 1.0676 is almost certain. However anyway way you dice it the RR is terrible. Therefore, I would need to pick a higher TP with more or less the same probability, take a miniscule position as a “test” trade, or not trade at all.

Here’s how I assessed this trade:
1.06763 on my chart is a very clear SR zone. But will it break? If it doesn’t break this hour, would it be a good bet to short and try for big RR? If it doesn’t break this bar, how likely is it to break in the following bars? If it doesn’t break, how low would it need to drop for me to be convinced that there would then be a high probability that price would NOT break the high?
A lot of these questions have indirect answers. I judge the probability that price breaks 1.05883 before breaking the tracked high at 1.0676 to be less than 15%. I also judge that either 1.0694 on the high side vs 1.0653 to be about 50-50. My probability to slightly stacked more to be bullish, with RR not too far off 1:1, so this is a long trade for me.

Edit: seeing price touch 1.0692 and then reject at 1.0681… Highs could still be coming but I jumped early at 1.0684. Not a perfect trade, but I am happy to walk away from an okay setup at anything better than breakeven.

Chart is developing a nice possible short play with great RR, sell stop for me, i’ll update tomorrow night with the result

I think doing these pictures help me develop and really think about whether or not I made the right decision. Flipping and saying “oh I should have done that” is a very easy thing to do as a beginner - it takes a lot of knowledge and experience to know when you should be happy with the result. It’s not just a feeling though. Since I don’t have an automated system and haven’t meshed all the pieces together (would take a bit too much time for me at this stage in my life), maybe in a year or two), I generally make decisions based on a few indicators that I give a lot of weight to. One of the things I do after each loss is to think about the other indicators in my bag. Were there any big signs from those indicators that should have changed my mind? I also think these kinds of pictures help others viewing my journal to understand a bit more, at least at a basic level, how I trade. There’s a lot of things I’d love to teach, but I don’t have plans on doing so on a detailed level until I have profits to back me up.

All in all, I was happy about this trade. Originally I was long, then went short, and price went up again. Should I have stayed long? Nope. Switching my position allowed me to first gain a little profit on the long side, allowing the losing short to be mitigated a little. Not changing my position at all would have led to a loss anyway, because the bear move would have eaten my stop. After seeing the down move develop, I was happy with my stop because I found it unlikely that price could break the highs. This sort of chop move two days in a row, specifically as it occurred, had about a 4-5% probability of happening, and those are odds I should be happy betting against any day.

Price looks good long, but I don’t like the RR atm, so I might just stay flat.

Not much to say yet. I took a look at my trades last week and learned a couple of more things. It’s nice when you find opportunities to apply them to straight away as I do now. Breaking 1.0718 is very likely, unsure for how long or far as of yet. Thought we would see some rebounding but price doesn’t seem to want to budge.

Seeing price break down a bit but this short of consolidation is causing moves in the lower time frames to appear more pronounced. I’m not sure how to interpret these patterns as they’re not as common. It does alleviate some of the pressure on the down wave so price could go either way. I’m slightly in favor of short, and holding short, but not nearly as convinced as I was yesterday.

Got a better break after I went to bed.

There are a couple of questions to ask when price starts to consolidate, particularly in a spot where you expected price to move and it didn’t. If I’m up slightly, should I take the profit? Should I set to break even? What is the trend status?
I stuck with the original stop because after taking a look at the swing, I wasn’t convinced that the low I saw the the correct low for the wave. I was looking at 1.0717~ which did hit, but the move didn’t “look right”. It took a lot of hours to get here where I can determine with probability what looks likely, but it certainly paid off.

Besides trading just the main wave, I’m starting to think of possibilities to map out longer term moves, without the need of building additional indicators. Rather, I have some theories of using the tools I have now in slightly different ways to achieve the indicator I want. I don’t think it’s perfect, or even great really, but I think it provides additional insight where I don’t have it now.

1.0707 is actually a tiny gap right now, so I can see price heading up that way, but I’m still holding one short position (cleared out one) and that will be the area I’m looking at to add on and take another wave down.

Tricky mid term waves in play, short term waves are playing out more or less as expected. I’m at -.47% for the month which I guess is okay. Knowledge is worth paying for. But I still want to pay as little for it as possible lol. I’m expecting swings in the 2-5% per month so in that sense half a percent is close to null and can be made up very quickly. I learned from my mistakes and traded better in the second half of the month.

Looking for shorts again but not quite at this level. Maybe in 8-12 hours.

Taking the week off and perhaps another week coming up for real life stuff. Normally I would take a couple of picks here and there but in the spirit of staying consistent and trying to only make trades I won’t regret, I’ll be very picky if I take anything. Mobile charts sometimes “look” a little different than they do on the computer. That said my outlook would probably be short, at least for another low below 1.067 before breaking a high of 1.0716.

Feb I think is just not going to be a good month for me. Quite a bit of vacation and traveling.

Looking for longs currently (we’re at 1.061x as of this writing). The safe long is at 1.063x, and more supply is hanging out at 1.0600, so it’s possible to see a dip down followed by an up move. Holiday chop however so we’ll see how it develops.

Edit: price is now 1.0611, floating in holiday chop indeed. Not surprised to see either side develop, so I’d rather be flat than in atm

Looking for longs now. 1.057x is the first target, with the current low being the stop.

Finally back! Price is at 1.0600~, going shot fro 1.0585 with 1.0623 as the stop. Simple retrace trade.

Edit: Got stopped out, I’ll be looking for the next opportunity whenever it arrives

March is almost over and will mark the end of phase 1 for me. Overall I would say just okay. Not good, but not terrible either. I’m sitting at -2% for the year, which I hope to turn into +10% by the end of the year.

I need to do a better job of tracking my trades and evaluating my trading opportunities accordingly. It’s a bit difficult because as I think I’ve mentioned before, my trading is basically through market patterns. These take shape in all sorts of forms, and as a result, there are trades ranging all over the place in terms of risk to reward, with the probability being the key element, like below:
low probability, low risk, high reward
average probability, average risk, average reward
high probability, high risk, low reward

In such a structure, who’s to say which is correct? However, when I trade all of them, I find that it is easy to miscalculate exactly how much risk to put in on each trade. When I’m trading for quarters and dollars, little changes make noticeable differences (i think).

I want to to a better job at evaluating the trades I take, both during the trigger-pull and the post eval. I find that to do so, I must “let people in” so to speak, into how I actually trade. These boards are a little barer than they used to be, so after some consideration, I don’t mind doing so as much anymore :slight_smile: But before anyone gets too excited, there are no secrets to be revealed, only theories to build on.

[B]Important note:[/B]
I was, and am, very hesitant to put out this sort of content in the public space because well, it might just not work. And in the process, I don’t want to draw too much attention to a method that could just be plain terrible. This isn’t a system that one can just test for a little and conclude that it sucks and waste a little time. It is instead built on theories and ideas about how the market works - things that one can’t [I]simply[/I] test. As a result, if such a theory or idea is bad, then the resulting tester wastes a tremendous amount of time. And for that, I feel bad. And so, although obvious, take everything with a grain of salt, with a suspicious eye, with a skeptic’s POV to wait for not when it succeeds, but fails.
[B]End note[/B]

Here we go:

I haven’t put too much time into trading lately, but here are my “big ideas”, or chart structures that I think a lot about when it comes to trading these days, and have been working on since the start of my career (lol). :

  1. Daily direction (Price) - Momentum. Price that has moved in a specific direction has a tendency to continue in that direction. If price is up 20 pips, it is more likely to finish at +40 than it is 0 or -20. This is not “physics”, this is just a fact of markets and of many inanimate facets of life.

  2. Daily minimum move (Price) - Barring massive holidays, price moves. It is more likely to be at +40 or -40 than it is to be between -40 and +40. Nothing new, but combined with other knowledge it gives the trader a good place to put conservative TP/SL marks.

  3. Currently weekly structure (Price) - Price is not random. If one were to track a weeks high and low, they tend to occur over a period of 2-3 days. It does not take a week to develop, nor does it constantly make new weekly highs followed by weekly lows.

  4. Current wave (Price) - Traders pay attention to current highs and lows. Price will be tugged towards one end or the other.

  5. Likely wave pattern (Price) - The concept of a trend wouldn’t exist if it didn’t at least work some of the time. They do exist, and they do work.

  6. Current pattern in wave (Price) - Trends don’t last forever, and things that aren’t trends can’t stay that way either.

  7. Current time with respect to current wave (Time) - Similarly, price doesn’t trend forever, and things that aren’t trends can’t stay that way forever.

  8. Current time with respect to previous waves (Time) - Sometimes, certain hours of the day favor certain types of moves, specifically tops and bottoms. This isn’t extremely reliable, but boy does it look insane when it works.

Not going to give charts for all of these, but will likely be labeled in future posts.

Things that go into a trade decision:

I try to take as many things into consideration as possible. Everything is a probability/reward balance. Everything is a up probability vs down probability scenario. Simple things but TA is, well, TA. You should have a desire to find out as much as you can about everything that you can.

Things that I considered in this trade in accordance to the post above (in no particular order):

  1. Likely wave pattern
    Exploring and thinking about waves will get you to ask the important questions about trading: what does a chartist care about? How much movement “matters” within what time frame/ You don’t have to trap price in a box to analyze it. Analyze it’s surroundings as well, understand how much wiggle room there is. Does it make a difference how you draw them? What’s a good rule for establishing such a thing?

  2. Daily direction and minimum daily move

If you read closely, you can see that so many more of the elements, not just the three I mentioned, are being used in this analysis.